DIY to Optimize the Ecommerce Marketing Performance Using Blended ROAS
It would not be wrong to say that without digital marketing, the eCommerce world would not get to know one another better. As this sector is booming to an extent, we are seeing robust data protection and the rise of first-party data security. With this, the need for a sharper metric comes into notice to detect the success rate of advertising. If talk about one go-to metrics that marketers have been relying on for a long time is the return on ad spend (ROAS), as it helps to detect the key indicators of how well the ads are performing.
But it's obvious that online advertising has become more complex over the years, and so did the campaigns. Marketers are no longer limited to just one channel or ad type. Instead, the advertising efforts are most likely to span across multiple platforms and formats. Blended metrics are among those measuring tools that have gained popularity in recent years and offer a more accurate measurement of marketing performance compared to traditional ROAS.
In this blog, the readers will learn about the benefits of using Blended ROAS with their marketing or PPC campaigns to calculate the progress and how to incorporate the uses to optimize the overall performance.
What is Blended ROAS?
The Blended ROAS or ‘Return on Ad Spend’ is a metric that takes into account the impact of multiple marketing channels and the touchpoints to measure the overall customer journey. Leaving traditional ROAS, the only factor about direct revenue generated from ad campaigns, it offers a more comprehensive measurement of marketing performance. Blended ROAS enables the calculations by combining the revenue generated from all the marketing channels and touchpoints.
Blended ROAS provides a more accurate picture of the true value of marketing efforts, making more informed decisions about how to allocate the marketing budget.
Evaluating the multiple factoring of different marketing channels, the blended ROAS provides insights into the effectiveness of marketing plans for eCommerce businesses. It helps marketers to identify which channels are generating maximum returns and how the optimization should be there enabling marketing spend.
The Benefits of Using Blended ROAS for Ecommerce Businesses
The Blended ROAS offers a more comprehensive and detailed measurement of marketing performance compared to traditional ROAS. Certain factors allow different marketing channels and touchpoints, and here the Blended ROAS offers a more complex view of the entire customer journey. It helps the business to understand the impact of marketing efforts overall buying experience. It offers the potential insights that enable effectiveness on the entire marketing strategy, measuring the overall effect of the marketing channels.
Blended ROAS utilizes more informed decisions about marketing spend having a clearer picture of the true value of the marketing efforts. It helps the business to optimize the spending for the maximum ROI ensuring that marketers will invest in the challenges that can only generate the highest returns.
This measurement allows us to embrace the marketing budget for maximum ROI by providing more advanced measures, elevating performance, and insights into more effectiveness of the overall marketing strategy. It helps the business to drive maximum growth, profitability, and the best marketing efforts to gain the maximum results possible.
How to Calculate the Blended ROAS for Ecommerce
The calculation of Blended ROAS involves the complete assigning of value to the different marketing touchpoints, determining the impact on revenue generation.
Determine Attribution Models: The attribution models of ROAS refer to the rules that are assigned to credit different marketing touchpoints. There are several types of attribution models, which include first touch (Giving credit to the first touchpoint customers interact with), a last touch (Giving credit to the last touchpoint before conversion), and multi-touch (Assigning credit to multiple touchpoints that lead to a conversion).
Assign Values to Touchpoints: The attribution model is determined, which is assigned to each touchpoint based on their impacts on revenue generation. It directly leads to a sale that may have a higher value than others which simply increases the brand awareness.
Calculate Blended ROAS: The blended ROAS can be calculated by segmenting the total revenue enabling total ad spend across channels and the touchpoints. The calculations provide a more accurate measurement of marketing performance compared to traditional ROAS.
To calculate the ROAS, there is a formula, suppose, you spent $5,000 on a Facebook ad campaign and earned $20,000 from it, and you had to calculate the ROAS then you can calculate it by,
Attribution Modeling & Customer Acquisition Cost (CAC)
The Attribution model is a process of assigning credits to different marketing channels and touchpoints for driving maximum conversions. The people need to have a clear understanding of the true impact of an ad campaign on customer acquisition and revenue generation.
There are various attribution models to pick from and each model has a different perspective on how the marketing efforts contribute to conversions. By enabling the attribution, the user can identify the channels and touchpoints that are most effective and enable the allocation of ad spending accordingly.
The customer acquisition cost (CPC) is also one important metric that helps with the evaluation of the effectiveness of an ad campaign. CAC enables the cost of acquiring new customers and helps them to understand how much the people are spending to bring in new businesses. By comparing CAC the customer’s lifetime value (CLV) helps to determine ad campaigns that are quite profitable.
How to Implement the Blended ROAS with Marketing Strategy
The Blended ROAS is a powerful tool to optimize marketing spend and to improve overall performance. The implementation of Blended ROAS in the marketing strategy needs to follow certain steps.
Set clear goals: Determine the clear goals to achieve your marketing efforts to identify the metrics that help ecommerce to measure success.
Select Attribution Models: Choose the attribution models enabling what fits best with the marketing strategy. There are several models to pick from including first click, last click, and the multi-touch.
Assign Values to Touchpoints: The assignment should be done to each touchpoint based on their impact on the customer journey. It requires the formula to be used or a software tool.
Track the Performance: The monitoring of the performance of campaigns needs to be done regularly and to adjust the strategy as needed based on the Blended ROAS data.
The successful marketing strategies implement the Blended ROAAS that includes the optimization of Ad spending across channels and improve customer segmentation for targeting profitable customers.